US futures rise ahead of US election and Fed decision
US futures rose today as traders wait for clarity ahead of the US election and Federal Reserve interest rate decision. Dow Jones, S&P 500, and Nasdaq 100 futures are all up by more than 1.50%. The final polls predict that Joe Biden, the former vice president, will win the election. Still, regardless of who wins, investors hope that the final vote will provide clarity about US policies and possibly usher in a new stimulus. Also, the market hopes that the Fed will send a signal of additional stimulus as it meets this week. Additionally, US futures have risen ahead of key earnings from companies like PayPal, Waste Management, and Berkshire Hathaway.
The euro is little changed today as traders react to the better-than-expected PMI numbers from Europe. According to Markit, data from the Eurozone showed that manufacturing PMI increased from 54.4 in September to 54.8 in October. That was better than the consensus estimates of 50.4. The manufacturing sector expanded in most European countries. In Germany, the PMI rose to 58.2 while in Italy, the PMI rose to 53.8. In Spain, they rose to 52.8 while in France, it rose to 51.3. However, investors are still concerned about the bloc’s performance in November as more countries implement lockdowns.
The British pound rose slightly today as traders reflected on the new lockdown in England and the strong manufacturing data. According to Boris Johnson, the lockdown, which will last to the end of the month, is necessary to prevent the disease from spreading. Analysts believe that the new lockdown will strain the country’s resources, which has seen its total debt rise to more than £2 trillion. Meanwhile, as in the rest of Europe, the manufacturing sector in the UK did well in October as the PMI rose to 53.7.
The EUR/USD pair is trading at 1.1650, which is slightly below the intraday low of 1.1620. On the four-hour chart, the price is still inside the horizontal channel that is shown in yellow. Also, the bars of the awesome oscillator is below the neutral line while the Relative Strength Index (RSI) has moved to the oversold level of 30. Therefore, the pair is likely to remain inside this channel during the American session. However, a power move below the support at 1.1620 will see the price continue falling and possibly move below 1.1600.
The GBP/JPY pair is little changed today as traders react to the PMIs and lockdown in the UK. The pair is trading at 135.22, which is in the same range it was since Wednesday last week. The price is also below the double top pattern of 137.80 that happened in October. It is also slightly below the 25-day and 15-day exponential moving averages while the signal and main lines of the MACD are below the neutral level. Therefore, I expect that the price will remain at the current range with the key support and resistance being at 134.40 and 136.0.
The DAX index bounced back to an intraday high of €11,768. On the four-hour chart, the price has moved above the 15-day exponential moving averages. The signal line has made a crossover with the histogram of the MACD. It has also formed a bullish engulfing pattern. Therefore, while the index is likely to continue rising, there is also a possibility that we will see more volatility on Wednesday as we start receiving US election results.